Brazil’s Crisis and the New Right

The impeachment process against President Dilma Rousseff resulted from the conjunction of three factors: the rupture of the alliance with business owners, the rise of a new militant right, and the PT’s serious mistakes after abandoning the streets. What remains is a wounded society and an extractive model that went unquestioned by the left and undermined the hegemony of the Lula current.

The impeachment process against President Dilma Rousseff resulted from the conjunction of three factors: the rupture of the alliance with business owners, the rise of a new militant right, and the PT’s serious mistakes after abandoning the streets. What remains is a wounded society and an extractive model that went unquestioned by the left and undermined the hegemony of the Lula current.

“I learned not to underestimate Brazil’s ability to sabotage itself” proclaims Brazilian historian José Murilo de Carvalho (El País, April 16, 2016). He argues that Brazilians are living under “the politics of hate that began in the 1950s with the National Democratic Union against Getúlio [Vargas] that culminated in the 1964 coup.” Later, the PT took on redirecting that same culture to the left, adopting, without saying so, one of the slogans of a rightist politician: roubo, mas faço (I steal, but I act).

De Carvalho has a pessimistic view of the country’s future. “The new politicization bypasses parties. At the moment, there is no party that is able to organize, not even Marina Silva’s network. And if this continues, there won’t be a future.”

The political crisis that initiated impeachment procedures against President Dilma Rousseff highlights the disaster of the Brazilian political system, from its democratic institutions to its political class. The underlying reasons for the current crisis are not easy to trace. You have to look at the long term – the persistence of a colonial society that has naturalized racism – alongside the new winds blowing in the world, the rise of a new right anchored in the industrial business and upper middle classes, and widespread political corruption. Add to all that a lack of clear direction in the Lula and Dilma governments, which still have failed to adequately interpret the protests of June 2013.

Motivation of the Business Class

The Federation of Industries of the State of Sao Paulo (FIESP) is one of the main promoters of Dilma’s removal. Its building on Avenida Paulista flaunts a huge neon sign “Renúncia Já,” over the green and yellow colors of the national flag.

Government supporters point out that the FIESP played a prominent role in the 1964 coup. The industrialists’ arguments for impeachment stem from three criticisms: a “statist” management system, much more so than under Lula; errors in economic policy that led to the deepest recession in the history of the country; and a bad relationship with the [industrial] sector without space for dialogue, which caused deep mutual distrust.

The business daily Valor prepared a detailed report, consulting seven entrepreneurs, five economists and political scientists to decipher the reasons for rejection, bordering on hatred, of the president. It found that this attitude “was born in her first term (2010-2014), and mixes ideological and pragmatic reasons” (Valor, April 15, 2016).

Unlike the industrial class of the 1990s, the current group is more globalized, more diversified and more concentrated in large companies and groups, which control business entities and call for long-term policies. On the one hand, they find Dilma “inflexible and arrogant,” because she believes she’s the “owner of the truth” and felt herself above dialogue with the business class, compared to Lula’s “charismatic negotiator” character. They miss Lula’s (and briefly Dilma’s) Minister of the Economy, Antonio Palocci, who they define as “a great articulator.”

But beyond persona, the industrial class blames the government for two policies that hurt them: the reduction of the bank spread and of interest rates (Selic rate), and the drop in electricity prices between 2011 and 2012. In principle, both measures should favor industry, but it went the other way around. Industry stuck its traditional stance: the state should not meddle in private-sector earnings.

Industrialists had been demanding a reduction in taxes and even applauded the cut in energy prices. But those interviewed by Valor pointed out that financial profit is not the exclusive preserve of banks, since the industrial sector has part of its capital in the financial sector and the reduction in interest rates affected their profits.

“The reduction in the interest rate also affects the profits of the industrial class,” but these contradictions “were little understood by those who formulate public policies, who do not understand the current overlap between industry and finance, something that did not exist decades ago” (Valor, April 15, 2016).

One of the business owners surveyed argues that “the government lacked the sophistication to understand what was happening in the world and in Brazil, as the new post-2008 crisis situation was poorly evaluated by the PT governments. Industries went into the red and the country had a very broad debate about deindustrialization, which the government never paid enough attention to.”

The participation of manufacturing in the GDP fell from 15 to 10% and the net profits of the thousand largest companies went from 20% in 2010 to a negative margin of 35% in 2014, according to ValorData.

When the serious problems began, the government bet on short-term measures in an election year that caused more difficulties for the industrial sector. In the Valor survey, business owners say almost unanimously that “the president lost the ability to govern the country” and that it is the current un-governability that has led them to support the impeachment process.

Most, however, prefer new elections because they know that the new government will not have the legitimacy needed to confront the difficult economic situation.

The new militant right

Business’s critiques may seem insufficient to explain the drastic step of impeachment. The core problem is that the industrialists, ceased regarding the government as “theirs,” an ideological perspective that intensifed at a time of crisis. They also look, primarily, at the short-term. And when things go wrong, ideology begins to occupy an exaggerated role.

From the most unexpected corners of Brazilian society, a strong conservative groundswell has been growing for several years, which manifests in a veru different rightwing from that which supported the 1964 coup. The new right is one that accepts diverse sexual options and the legalization of marijuana, for example. This new right was born under PT governments. At first it seemed very ideological, but it became more flexible and gained the ability to influence at key moments.

This new right first hit the streets on August 17, 2007, organized by the Brazilian Civic Movement for the Law (known as Cansei) against corruption. In a demonstration of 5,000 upper-middle class people, who wore exclusive clothing brands and promoted the rejection of the political spectrum, including former President Fernando Henrique Cardoso of the social democratic PSDB (UOL, August 17, 2007). The mobilization was supported by the FIESP and the Order of Lawyers of Brazil (OAB), acronyms that are repeated in this type of calls-for-action from that date onward. The protesters expelled those carrying party flags, even of the right, shouted against Lula, and were accompanied by popular telenovela actresses and actors.

By 2009 this new right began to gain presence in the student centers in several universities that had hitherto been under the hegemony of leftist and extreme leftist parties. The Students for Freedom group won the leadership of the student center at the University of Brasilia (UNB) in 2011 with 22% of the vote in the face of the fragmentation of the left, and was re-elected for the fourth time in 2015 with 60% of the vote. Students for Freedom belongs to a large network based in Washington that manages resources from conservative foundations; conducts conferences, seminars and training; and defends the legacy of neoliberal economist Friedrich Hayek. At UNB the group focused on everyday student issues, such as cleaning bathrooms and security on campus. Its main supporters were in the engineering, law, and economics faculties.

In those years the right won several state universities, such as Minas Gerais and Rio Grande do Sul, and grew in others, always rejecting partisan politics, accusing leftist militants of seeking government positions. Its boards were formed in schools and organized groups of a new type.

Some of the young people shaped in Students for Freedom were later founders of the Free Brazil Movement (MBL), one of the most active organizations in the right-wing offense against the PT government. Kim Kataguiri, 20-year-old former college student, is one of the brightest stars in the firmament of the right. Kataguiri argues that “public schools are real centers of recruitment for traffickers” and defends the liberalization of the state, lower taxes, less bureaucracy, and the privatization of all public companies. Folha de São Paulo gave him a weekly column; he is one of the most popular personas in the paulista middle classes.

He calls the Movimiento Passe Livre “terrorist” and said he was “inspired by Ronald Reagan and Margaret Thatcher” when he was nominated by Time as one of the 30 most influential teenagers in the world in 2015 [1]. In April 2015, the MBL marched a thousand kilometers from São Paulo to Brasilia, following the route of the bandeirantes [2], passing through towns and cities “spreading the gospel of economic liberalism,” as a chronicle from The Guardian notes [ 3].The British newspaper reminds us that MBL leaders like Kataguiri, are “fans of Milton Friedman and Friedrich Hayek” and define Rand Paul as “the American politician who best represents their values.” That young hard right was gradually gaining popularity in universities, going as far as sweeping the board of several student centers. Its militants were trained at institutes like the Charles Koch Institute [4] of businessmen Charles and David Koch, close to the Tea Party and financiers of the National Rifle Association in the United States (Carta Capital, March 23, 2015).

Before the June 2013 explosion, the new right was already a social force and had experience in conducting the masses, just as leftist militancy abandoned the streets and keeled over to the state. The new right created a culture of street protest, which allowed it to redirect marches toward its objectives. Based on these experiences, groups born in 2014 convene millions today: Movimento Brasil Livre, Vem Pra Rua and Revoltados On Line [5].

A wounded society

The wall set on the esplanade in front of Congress in Brasilia to separate those in favor and against impeachment encapsulates the impossibility of coexistence between different sectors of Brazilians. Since June 2013 the right has had the initiative in the streets, even managing the miracle of winning that space from the left, as it won the student centers before.

Now the company looks split in two, as reflected in the outcome of the 2014 presidential elections. A social wound “a la argentina,” according to philosopher Nicolás José Isola, who argues that in his country “we know it and historically reproduce it with a unique artisanal craftsmanship”(El País, April 15, 2016). It is worth pausing over this situation that leads to the “marginaliz[ation of] anyone who thinks otherwise.” For Brazil, this is new.

It is not the first time a broad political polarization has existed. There was one before the 1964 coup between supporters and opponents of President João Goulart. It was a dispute between business owners and land owners and urban and rural workers, between right and left. In those years, there was a clear social fracture but both sides sported the same skin color, as it was an essentially urban dispute when the peripheries and favelas hardly appeared in the geography of the cities.

Now there is a clear ethnic divide between afro-descended people in the North and urban peripheries, and the white middle classes of the South and Southeast, an odious update of racism and discrimination – to the point that opponents of the government argue that there was no racism in Brazil before, and that it began when the Lula government implemented quotas for black people in universities.This ethno-political split in society is perhaps one of the main consequences of the current crisis in Brazil, and it will not be mended soon. In demonstrations against the government of Salvador (Bahia), there were no afro-descended people, when they are the absolute majority of the population of the main city of northeast.

Here lies one of the nodes of the crisis. “After 14 years at the head of the executive branch, sitting on 40% of Brazil’s GDP, or nearly half of the tenth largest economy in the world, PT governments did not increase the political power of the popular classes,” says political scientist Bruno Lima Rocha politician (IHUOnline, April 15, 2016).The type of chosen alliances weakened the political force with which Lula took office. There was a pact between industrialists and PT unions. But the left misunderstood the pacts, as Lima Rocha says: “This pact was broken because, ignoring the simplest rules of politics, there was no form of coercion or power of popular veto for the coup attempts of a Brazilian right whose economic agents do not get even enough to be nationalist. ”

A mentality shunning conflict prevailed, something like a gentlemen’s agreement between adversaries who can only work if the popular sectors have enough strength to make them comply. The four PT governments “did the opposite of what they should have, in the sense of securing and expanding the organized power of the people against bourgeois-colonial elites,” concludes Lima Rocha. Elites which are, additionally, subordinate to the United States and English-speaking countries.

It is true that Lula returned to the streets in the final stretch of the impeachment process, when it was nearly all lost. The impression is quite different when viewed from another side: their Lula had taken to the streets in June 2013 to put the brakes on millions of frustrated Brazilians because promised changes did not arrive, it is possible that things had marched on different paths. They did not leave, neither Lula nor the PT nor pro-government social organizations. They left the way clear for the right to take to the streets and managed to seize the popular unrest until it achieved its objectives.